Kansas legislators were skeptical of projected savings in education spending from Gov. Sam Brownback’s plan as they did preliminary work Monday on a new formula for distributing state aid to public schools.
Lawmakers in both parties questioned whether the state would quickly see savings from Brownback’s plans to create a single health insurance plan for the state’s 286 school districts and centralize some purchasing of supplies and services.
Brownback’s budget proposals assume $47 million in savings for fiscal year 2018, which begins in July, and $89 million in fiscal 2019.
Cost savings are an important issue because lawmakers must close potential budget shortfalls totaling nearly $1.1 billion through June 2019. In addition, the Kansas Supreme Court is expected to rule soon in an education funding lawsuit on whether Kansas spends enough on its public schools to provide a suitable education to every child.
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Brownback and the GOP-controlled Legislature’s leaders also want to draft a new formula for distributing the state’s $4.1 billion a year in aid to school districts. House and Senate committees continued hearings Monday on potential elements of a new law.
The governor’s estimates for cost savings are drawn from a 2016 report on possible budget efficiencies from a consulting company hired by the Legislature. But school districts and legislative auditors have questioned some of the numbers, leading some lawmakers to doubt that the promised savings would materialize as quickly as promised.
“It’s going to take, I’d say, at least a year, maybe two years, to get it done,” said Rep. Kyle Hoffman, R-Coldwater.
Under Brownback’s budget proposals, the bulk of the estimate savings – $40 million in fiscal 2018 and $80 million in fiscal 2019 – would come from consolidating districts’ health insurance plans.
Legislative auditors called the estimates “aggressive” in a report earlier this month. Surveying 101 districts that pay 73 percent of all districts’ health insurance premiums, the auditors projected $63 million in savings for them if the state started a single health insurance plan – but $25 million of that would come from higher out-of-pocket costs for employees.
Budget director Shawn Sullivan said the administration will work with legislators to come up with a plan that wouldn’t increase out-of-pocket costs for school district employees. He said even the auditors’ numbers show that the potential for savings is significant.
Consolidating health insurance plans is complicated because many districts offer better coverage than the state does to its employees. Also, benefits have been negotiated between teachers and school boards.
“Their insurance benefits may be better because their wages have been lower – or the reverse,” said Mark Tallman, a lobbyist for the Kansas Association of School Boards.